The Situation

Another firm brought me an I-140 that USCIS had denied. The beneficiary was a cook; the petitioner was an established restaurant chain, with roughly two hundred people on its payroll. The denial rested on a failure to show the ability to pay the proffered wage.

Ability-to-pay denials are ordinary. This one was not. The petition was denied because the petitioner did not produce its own federal tax returns, the returns it had no obligation to file. The petitioner was a disregarded entity: for federal income tax purposes it was not separate from its owner, filed no return of its own, and reported its income and expenses on the owner’s. See 26 C.F.R. § 301.7701-3. Everything turned on one question: May the government deny a petition for failing to produce a document the law never required the petitioner to create?

The Return That Could Not Exist

The regulation lists the ways to show ability to pay: annual reports, federal tax returns, or audited financial statements. See 8 C.F.R. § 204.5(g)(2). Tax returns are one route, not the only one. The same provision goes further for large employers: where the petitioner employs one hundred or more workers, USCIS may accept a statement from the organization’s financial officer. This petitioner employed about two hundred. The statement was in the record, with the Forms 941 that corroborated it, the parent’s returns, and a CPA’s letter explaining why the petitioner had none of its own.

I conceded what the case law plainly holds. Tax returns are the established measure of ability to pay, and the agency was not obliged to take a financial officer’s statement in their place. See Elatos Restaurant Corp. v. Sava, 632 F. Supp. 1049 (S.D.N.Y. 1986). But the statement was not offered in place of returns the petitioner had chosen to withhold. It was offered because no such returns existed, and the regulations say what to do when primary evidence is unavailable: secondary evidence takes its place. See 8 C.F.R. § 103.2(b)(2)(i). Discretion to weigh that evidence is not a license to ignore it. USCIS never explained to the petitioner why the evidence of its employment of two hundred workers fell short. It asked again for the return that could not exist.

The denial’s logic turned on itself. USCIS had refused the petition because the petitioner had not proven that it and its owner were one and the same legal entity. Yet that identity is the whole meaning of a disregarded entity: to be disregarded is to be treated, for federal tax purposes, as nothing apart from one’s owner, a single taxpayer by the Treasury’s own ruling. A disregarded entity files no return precisely because it is not separate. So the missing return was not a gap in the proof. It was the proof.

An Order That Withdrew Itself

USCIS had asked for the returns three times: in a request for evidence, in a notice of intent to deny, and in the denial that made their absence its ground. Each time the answer was the same, because the returns did not exist. I put it all in a motion to reconsider. Four months later USCIS answered. It withdrew its denial and, in the same order, denied the petition again:

“The petitioner has established that the decision was incorrect based on the evidence in the record when Form I-140 was initially denied. … It is ordered that the original decision denying Form I-140 be withdrawn. It is further ordered that the underlying petition be denied.”

The first sentence grants the motion. The last denies the petition. Between them the order weighed nothing: not the financial officer’s statement, not the Forms 941, not the exemption that explained the missing returns.

A USCIS decision can be right and reasoned, right and unreasoned, wrong and reasoned, or wrong and unreasoned. This order was the last of these, and a single line gave it away on both counts. “The petitioner has established that the decision was incorrect” is not the language of a denial; it is the language of an approval, left in place when an approval template was pressed into service to deny. USCIS had not reasoned its way to a denial; it had filled in a form, in a way I had seen before. This is how many of these denials are made: not argued but assembled, the adjudicator’s reading of the record replaced by boilerplate that does not always match the result. The one true line in the order was the one the template forgot to delete.

The Result

So I filed a second motion. It pressed the contradiction and asked USCIS to weigh the payroll records, as its own regulation and its own ability-to-pay memorandum allowed. And it made one more request: if USCIS meant to deny the petition once more, it should certify that denial to the Administrative Appeals Office, as the regulations allow when a case raises an unusually complex or novel question of law. See 8 C.F.R. § 103.4(a)(1). There the question would have to be answered, the one thing USCIS had not done.

Two months later the petition was approved. Nothing in the argument had changed. It took a second motion to make the order on the first motion agree with its own first sentence.